[et_pb_section fb_built=”1″ custom_padding_last_edited=”on|desktop” admin_label=”Section_2_Text Left:” _builder_version=”3.22″ background_color=”#f7f7f7″ custom_padding_tablet=”50px|0|50px|0″ custom_padding_phone=”” transparent_background=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on”][et_pb_row padding_mobile=”on” column_padding_mobile=”off” custom_padding_last_edited=”on|phone” _builder_version=”3.25″ background_color=”#ffffff” background_size=”initial” background_position=”top_left” background_repeat=”repeat” max_width=”768px” custom_padding=”60px|60px|60px|60px” custom_padding_tablet=”” custom_padding_phone=”40px|20px|40px|20px” make_fullwidth=”off” use_custom_width=”on” width_unit=”on” custom_width_px=”768px”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_post_title categories=”off” comments=”off” disabled_on=”off|off|off” _builder_version=”3.0.98″ title_text_color=”#00afff” title_font_size=”36px” meta_text_color=”#95989a” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||40px|” title_font_size_tablet=”” title_font_size_phone=”28px” title_font_size_last_edited=”on|phone” parallax_effect=”on” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_module=”7384″ saved_tabs=”all” locked=”off”][\/et_pb_post_title][et_pb_text admin_label=”Text_B:” _builder_version=”3.27.4″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” animation_direction=”left” use_border_color=”off”]<\/p>\n
Buying an investment property is a financial commitment that many property investors choose to split with another person. But did you know that co-owning your investment property with someone else will impact your tax return each year?<\/p>\n
With tax time quickly approaching, there\u2019s no better time to learn the \u2018dos\u2019 that come with co-owning an investment property.<\/p>\n
<\/p>\n
Your legal interest in the property determines how you split the income and expenses on your tax return, even if there is an agreement between owners, either oral or in writing, stating otherwise. As joint tenants the split will be an equal 50:50, or if you\u2019re tenants in common you may have different ownership interests. If you want to check what your legal interest is, you can find this information on your title deed.<\/p>\n
<\/p>\n
Most property owners understand they need to declare all their rental income on their tax return, including things like insurance payouts and bonds they become entitled to keep. However each year the ATO sees some property co-owners declare the incorrect portion of rental income on their tax returns. You need to divide rental income according to the portion of ownership you have. You can\u2019t assign more of the income to one owner just because they are in a lower tax bracket.<\/p>\n
<\/p>\n
You can only claim a tax deduction in line with your ownership percentage even if you pay for all the expenses. You can\u2019t assign more expenses to the higher earner; they need to be split according to each owner\u2019s legal interest.<\/p>\n
<\/p>\n
When you jointly purchase your rental property, it\u2019s a good idea to discuss how accurate record keeping will take place. Will one person be responsible, or will each owner keep track of the income earned and the expenses incurred? Knowing this upfront will ensure all the required documents are kept, and make it easier to have all your records on hand at tax time, whether you use a registered tax agent or lodge yourself.<\/p>\n
<\/p>\n
The ATO recently investigated an expense claim that had not been apportioned correctly. Max and Sarah had joint ownership of a rental property and had correctly declared income in accordance with their ownership interest.<\/p>\n
However, they did not declare their expenses in accordance with their ownership interest \u2013 \u2013 as the higher income earner, Sarah claimed the larger expenses such as interest and land tax and as the lower income earner, Max claimed the smaller expenses.<\/p>\n
The ATO adjusted the expenses according to the ownership interest and Sarah had to pay back more than $8,000 in tax.<\/p>\n
Interested in finding out more about rental properties and tax? Visit www.ato.gov.au\/rental<\/a> or download our rental properties guide at www.ato.gov.au\/rentalpropertyguide<\/a> Click here to like us on Facebook and see more updates like this.<\/a><\/strong><\/p>\n Hey there, do you enjoy the TRC-Gorod Blog? If you did, why don\u2019t you book into a Property Information Night in your area and get more information from our team. You can do so here<\/a>.<\/p>\n Also, if you can not wait, click here<\/a> to access the Property Mini Course and signup for our email newsletter. This FREE 2 hours video series gives you some of the top tips from our team that you can use right now. Thanks.<\/p>\n [\/et_pb_text][et_pb_divider color=”#f7f7f7″ divider_style=”dotted” divider_weight=”2″ disabled_on=”off||” admin_label=”Divider: 5px Dotted” _builder_version=”3.23.4″ height=”5px” hide_on_mobile=”off” saved_tabs=”all” locked=”on”][\/et_pb_divider][et_pb_image src=”https:\/\/trc-gorod.ru\/wp-content\/uploads\/2019\/07\/Staff_S-Saggers.png” align_tablet=”center” align_last_edited=”on|desktop” admin_label=”Image_75px: Sam” _builder_version=”3.23″ custom_css_main_element=”max-width: 75px;” use_border_color=”off” border_color=”#ffffff” border_style=”solid” animation=”left” sticky=”off” always_center_on_mobile=”on” global_module=”7383″ saved_tabs=”all” locked=”off”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row padding_mobile=”off” column_padding_mobile=”on” _builder_version=”3.25″ custom_margin=”40px|||” use_custom_width=”on” global_module=”7382″ locked=”on”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_blog fullwidth=”off” include_categories=”1″ show_categories=”off” show_pagination=”off” _builder_version=”3.0.94″ header_text_color=”#00afff” body_text_color=”#95989a” body_font_size=”13″ meta_text_color=”#95989a” meta_font_size=”13″ border_width_all=”1px” border_color_all=”#ffffff” border_style_all=”solid” border_width_all_fullwidth=”1px” border_color_all_fullwidth=”#ffffff” border_style_all_fullwidth=”solid” use_border_color=”on” border_color=”#ffffff” border_style=”solid” use_dropshadow=”off”][\/et_pb_blog][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The following article has been supplied by the ATO containing tips related to your investment property.<\/p>\n","protected":false},"author":54,"featured_media":7566,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":" The following article has been supplied by the ATO.<\/em><\/p> Buying an investment property is a financial commitment that many property investors choose to split with another person. But did you know that co-owning your investment property with someone else will impact your tax return each year?<\/p> With tax time quickly approaching, there\u2019s no better time to learn the \u2018dos\u2019 that come with co-owning an investment property.<\/p> Do: know what portion of ownership you have of the property.<\/b><\/span><\/p> Your legal interest in the property determines how you split the income and expenses on your tax return, even if there is an agreement between owners, either oral or in writing, stating otherwise. As joint tenants the split will be an equal 50:50, or if you\u2019re tenants in common you may have different ownership interests. If you want to check what your legal interest is, you can find this information on your title deed.<\/p> Do: divide the income according to your ownership interest<\/b><\/span><\/p> <\/a>Most property owners understand they need to declare all their rental income on their tax return, including things like insurance payouts and bonds they become entitled to keep. However each year the ATO sees some property co-owners declare the incorrect portion of rental income on their tax returns. You need to divide rental income according to the portion of ownership you have. You can\u2019t assign more of the income to one owner just because they are in a lower tax bracket.<\/p> Do: claim your correct share of expenses<\/b><\/span><\/p> You can only claim a tax deduction in line with your ownership percentage even if you pay for all the expenses. You can\u2019t assign more expenses to the higher earner; they need to be split according to each owner\u2019s legal interest.<\/p> Do: discuss your record keeping system<\/b><\/span><\/p> When you jointly purchase your rental property, it\u2019s a good idea to discuss how accurate record keeping will take place. Will one person be responsible, or will each owner keep track of the income earned and the expenses incurred? Knowing this upfront will ensure all the required documents are kept, and make it easier to have all your records on hand at tax time, whether you use a registered tax agent or lodge yourself.<\/p> Max & Sarah\u2019s story:<\/b><\/p> The ATO recently investigated an expense claim that had not been apportioned correctly. Max and Sarah had joint ownership of a rental property and had correctly declared income in accordance with their ownership interest.<\/p> However, they did not declare their expenses in accordance with their ownership interest - \u2013 as the higher income earner, Sarah claimed the larger expenses such as interest and land tax and as the lower income earner, Max claimed the smaller expenses.<\/p> The ATO adjusted the expenses according to the ownership interest and Sarah had to pay back more than $8,000 in tax.<\/p> Interested in finding out more about rental properties and tax? Visit www.ato.gov.au\/rental<\/a> or download our rental properties guide at www.ato.gov.au\/rentalpropertyguide<\/a><\/p>","_et_gb_content_width":"","footnotes":""},"categories":[45,15],"tags":[],"yoast_head":"\n
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